Chloe Limited, a retail outlet in Table View, Cape Town, orders 128 000 bottles of water...

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Chloe Limited, a retail outlet in Table View, Cape Town, orders 128 000 bottles of water per year from a distributor in Polokwane. One bottle of water delivered to Chloe's central warehouse costs 20 cents (including freight charges). The Company borrows funds at 10.25% interest to finance inventories. Chloe Limited's purchasing agent has calculated that it costs R 6 to place an order for bottled water and that the variable annual expense (insurance, electricity, and handling) is 4 cents for each bottle of water. Required: a) Calculate the number of bottles of water that Chloe Limited should request in each order. b) Calculate the annual number of orders at the EOQ. c) Calculate the total annual ordering costs at the EOQ. d) Calculate the total annual carrying costs at the EOQ. (3 marks) (3 marks) (3 marks) (3 marks) Chloe Limited, a retail outlet in Table View, Cape Town, orders 128 000 bottles of water per year from a distributor in Polokwane. One bottle of water delivered to Chloe's central warehouse costs 20 cents (including freight charges). The Company borrows funds at 10.25% interest to finance inventories. Chloe Limited's purchasing agent has calculated that it costs R 6 to place an order for bottled water and that the variable annual expense (insurance, electricity, and handling) is 4 cents for each bottle of water. Required: a) Calculate the number of bottles of water that Chloe Limited should request in each order. b) Calculate the annual number of orders at the EOQ. c) Calculate the total annual ordering costs at the EOQ. d) Calculate the total annual carrying costs at the EOQ. (3 marks) (3 marks) (3 marks) (3 marks)

Answer rating: 100% (QA)

To calculate the Economic Order Quantity EOQ we can use the following formula EOQ 2 D S H Where D An... View the full answer